Pub. 55 2014-2015 Issue 4

16 Increase in Average New Vehicle Cost 1988-2013 The NADA Dealer Profile provides a telling example of the reduction in dealer margins over the past three decades. Tracking the increased cost of the average retail vehicle in this country from year-end 1988 to year-end 2014 reflects a 3.6% increase in dealer gross profit. When you consider that inflation alone would have increased the 1988 dealer front end gross to $2,317 from $1,158 at a 100.1% inflation rate for those 26 years, consumers have saved significantly from dealer competition. When a so-called industry expert or a Washington bureaucrat claims that consumers can save money by purchasing directly from the manufacturer and bypass- ing the dealer, show them this real world analysis.  Cost to Dealer Gross Profit % of Sales Price Cost to Consumer 1988 $12,984 $1,158 8.19% $14,142 2013 $30,562 $1,200 3.78% $31,762 Increase $17,578 $42 $17,620 % Increase +135.4% +3.6% +124.6% From Mfg. From Dealer Total Increase Cost to $17,578 $42 $17,620 Consumer % of Total Increase +99.76% +.24% 100% Franchise Laws Benefit ConsumersWith Lower Vehicle Grosses